Asian ABS producers still ‘aggressive’ in Europe market

LONDON (ICIS)--Asian producers of acrylonitrile-butadiene-styrene (ABS) are still being "aggressive" with price offers to European buyers, market participants said on Monday.

"[South] Korean importers with no duty are aggressive," a European distributor said, adding the South Korean suppliers have dropped prices by about €50/tonne ($65/tonne), helped by a further drop in import duty on 1 July 2013.

The duty on ABS imports for South Korea into the EU is now 1.6%, down from 3.2% previously, a South Korean producer told ICIS.

Last week, Asian-produced general purpose grade ABS was being offered at €1,650-1,750/tonne FD (free delivered) west Europe. Some players in the European market suggested that the low end of that range would perhaps be an exception, and that prices were more around €1,700/tonne and up.

Of particular interest, a European producer said a German buyer had been offered a fixed six-month price of €1,760/tonne FD NWE (northwest Europe) until December 2013.

The producer said this could be a sign that, despite most Asian producers running at below 70% capacity, weak ABS demand in Asia is causing them to look to Europe to move surplus volumes.

This fixed-term price, however, may not be as attractive as it may seem, a European buyer said on Monday. If European butadiene (BD) prices continue to drop as they did in July, and if feedstock styrene continues to surge in Asia, European produced ABS may become more attractive, with the added incentive of significantly shorter delivery times.

Speaking on Friday last week, a European trader said that it is unlikely that Asian prices will drop further, though there may be room for further downward adjustment, albeit very small.

European July domestic ABS prices are looking likely to see a rollover to reductions of up to €30/tonne because of the €250/tonne drop in feedstock butadiene, expected lower demand ahead of the summer holiday period, and pressure from the Asian producers.